# DeFi Wallets : Reducing your exposure to risk👀

The recent turmoil caused by the FTX exchange’s collapse serves as a stark reminder of the hazards associated with relying on centralized, unverified, and frequently unregulated cryptocurrency exchanges to manage your entire crypto portfolio.

<figure><img src="https://2725927154-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FVzOI1pkvpwdgbDEtHl2Z%2Fuploads%2FFE9beoUPqEffhXT9dBGr%2F1_oZyeqFd7mdlfF-szVj2Qiw.webp?alt=media&#x26;token=152c153c-dc93-4458-b937-17f2c1d9d6ea" alt="" width="375"><figcaption><p>Pepe Wallet</p></figcaption></figure>

Disturbingly, the irresponsible and potentially criminal behavior exhibited by FTX’s leadership is not an isolated case, as other cryptocurrency exchanges have also demonstrated similar deficiencies in risk management and misappropriation of customer funds.

The collapse of a single exchange, resulting in investors losing their entire life savings, is a deeply distressing situation. It raises the important question of whether those investors truly comprehended the risks involved. It appears evident that they did not. As for myself, I want to clarify that I am neither a staunch supporter of decentralized finance (DeFi) nor an extreme advocate against regulation. My primary focus is on promoting education and empowering retail investors with the necessary resources to thrive in the digital markets.

Cryptocurrency investors can securely store their funds without relying on centralized exchanges by turning to decentralized finance (DeFi). In DeFi, investors have complete control over their assets, ensuring that they are not subject to the vulnerabilities of centralized platforms. By utilizing DeFi protocols, investors can avoid situations where their assets are unknowingly loaned out or subjected to other risks. DeFi offers the advantage of uninterrupted access to funds, allowing investors to freely manage and transfer their assets as needed. In summary, DeFi provides a solution for cryptocurrency investors to maintain full control over their funds while enjoying the benefits of a decentralized financial ecosystem.

It is indeed a prudent approach for cryptocurrency investors to allocate a significant portion of their portfolios to a DeFi wallet. Here are some reasons why:

**Self-custody** is a fundamental principle of DeFi wallets, such as the Pepe Wallet. In a non-custodial setup, when a user deposits assets into their DeFi wallet, those assets remain within the wallet and are not accessed or controlled by any third parties. The user maintains full control and ownership of their funds, with no reliance on intermediaries or centralized entities.

**Private keys —** DeFi wallets use private keys and seed phrases to allow their owners access. Without the private keys/seed phrase you are unable to get access to the wallet or its holdings. **In short: your keys, your crypto.**

In summary, adopting a strategy of keeping the majority of your investment portfolio in a DeFi wallet while maintaining a smaller ‘trading fund’ on centralized exchanges can significantly reduce the risk of losses in the event of an exchange collapse. The team aims to cater to users’ needs by offering user-friendly products that simplify navigation and maximize benefits in the digital markets. To achieve this, we have seamlessly integrated the recently launched Pepe Wallet with the upcoming Pepe centralized trading platform. This integration enables users to effortlessly transfer their assets between their trading account and their DeFi wallet, ensuring a smooth and convenient experience for managing and leveraging their assets in both DeFi and centralized environments.

The cryptocurrency market is still in its infancy, for us to build back better, lessons need to be learned. Until the market is closer to maturity, it is paramount that users understand the tools at their disposal to ensure their safety and success.

_**Learn more about our project on www.pewall.org**_
